If you have tankless electric, it can simply be insulated... but tankless electric are seldom mounted outdoor.
Service bulletin says: "the only way of assuring protection is to completely remove the heater during those times the area may experience freezing temperatures.
There are tankless with built-in heater for exterior installation.
Check your manual, or add a comment with specific model number and maybe I can find the information.
Here's why they install tankless outdoors: Because tankless burn more fuel per gallon of hot water. This requires larger gas line and larger vent pipe than typical tank-type gas water heater that is usually installed indoors.
They install tankless outdoors, so there is no need for expensive vent pipe, and because there is ample incoming air to support combustion.
So if tankless does not have factory-installed internal heater, then the unit can freeze easily when the combustion draws in cold air.
Of course you can put heat-tapes on the pipes but the heat exchanger inside will quickly freeze during periods when hot water is not being used, and combustion is not taking place.
You can move the tankless installation inside and use correctly-sized vent and intake pipes directly through the wall. This will generally protect tanklesss from freezing if room is heated adequately.
If you need further help, I’m available over the phone at
https://www.6ya.com/expert/gene_9f0ef4df2f9897e7
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